Snap Inc (snap) Has No Friends At The Minute!

Snap Inc (SNAP) is best know for its SnapChat app and recently hit the market in a blaze of glory. Just a short while later the shares are nearly half of their post float high. Have they been oversold just as they were over bought just after the float?

Price $14.73 @ 18 July 2017

 

I believe they were way overpriced and over-pumped early on. I have a put I bought recently for almost nothing when it was over $20 that it would drop below $17... I'm thinking that it will drop even lower when it reports its next earnings soon - I think low teens, perhaps even single digits is not out of the question - we shall see...

 

If we get even a whiff of a slowdown in activity or a slowdown in new account numbers the stock will tank. However, I think SNAP is one of these shares which will bounce sharply as and when technology shares are truly back in favour even just on improved investor sentiment. At some point it could become a takeover target - we have seen similar situations before.

 

Could SnapChat become a takeover target at these levels or lower?

 

I've done very well betting against SNAP with puts. I will be buying another put or puts in the next few days ahead of earnings.

 

The slightest whiff of a slowdown in activity across the customer base and the stock could be in big trouble.

 

SNAP's lockup is also expiring today I think.

 

Those loose sellers in the lockup would be better off selling asap rather than the potential threat of sellers hovering over the shares for weeks or months to come. This "will they wont they" situation could see the shares go a lot lower.

 

Shares in big trouble - still got your put JR?

Price $11.83 @ 11 Aug 2017